MSME exporters facing dip in demand in global markets

August 11, 2022 07:39 pm | Updated 10:12 pm IST - New Delhi

Representational photo.

Representational photo. | Photo Credit: BIJOY GHOSH

Facing slowdown in demand in the global markets due to the ongoing Russia-Ukraine conflict, MSME exporters have sought immediate intervention by the government to deal with the situation, industry players said.

The dip in demand may impact the country’s exports in the coming months, they added.

Ludhiana Hand Tools Association President S.C. Ralhan said the industry was passing through “acute recession” in both domestic and international markets.

“Most of the sectors, including hand tools auto parts and spinning mills, are working at 25-60% capacity only. At the moment, we are getting very small orders,” he said in a statement.

Most of the exporters said they had orders for only one or two months.

“This scenario would impact exports growth,” Mr. Ralhan added.

Sharing similar views, Dalpat Forge (India) Manager Ashwani Aggarwal said the demand situation was “bad” in both domestic as well as global markets like the U.S. and Europe.

“The government should support us to deal with the situation,” he said.

Leading leather sector exporter and chairman of Farida Group Rafeeq Ahmed said though the factories currently are running at full capacity, the order book position is gradually “dwindling” for the season.

“There are demand issues mainly in the U.S. due to high inflation there. We, as exporters are planning how to deal with this slowdown,” Mr. Ahmed said.

Federation of Indian Export Organisations (FIEO) vice chairman Khalid Khan added that the order book position was “bad.”

Exports dipped, though marginally, for the first time in 17 months in July, while trade deficit tripled to a record $31 billion fuelled by a more than 70% rise in crude oil imports.

The outbound shipments during April-July 2022-23, however, stood at $156.41 billion, an increase of 19.35% over $131.06 billion in the corresponding period last fiscal.

While the U.S. is the top market for domestic exporters, European nations including the Netherlands, Belgium, Germany, Italy and France, are among the top 20 destinations.

The ongoing war between Russia and Ukraine has severely disrupted the global supply chains.

The MSME sector account for nearly 40% of India’s exports.

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